Correlation Between AMTD Digital and Genius

Can any of the company-specific risk be diversified away by investing in both AMTD Digital and Genius at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining AMTD Digital and Genius into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between AMTD Digital and Genius Group, you can compare the effects of market volatilities on AMTD Digital and Genius and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in AMTD Digital with a short position of Genius. Check out your portfolio center. Please also check ongoing floating volatility patterns of AMTD Digital and Genius.

Diversification Opportunities for AMTD Digital and Genius

0.89

Correlation Coefficient

AMTD Digital  Genius

Very poor diversification

The 3 months correlation between AMTD and Genius is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding AMTD Digital and Genius Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Genius Group and AMTD Digital is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on AMTD Digital are associated (or correlated) with Genius. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Genius Group has no effect on the direction of AMTD Digital i.e., AMTD Digital and Genius go up and down completely randomly.

Pair Corralation between AMTD Digital and Genius

Considering the 90-day investment horizon AMTD Digital is expected to generate 0.36 times more return on investment than Genius. However, AMTD Digital is 2.77 times less risky than Genius. It trades about 0.27 of its potential returns per unit of risk. Genius Group is currently generating about 0.04 per unit of risk. If you would invest  287.00  in AMTD Digital on June 29, 2024 and sell it today you would earn a total of  76.50  from holding AMTD Digital or generate 26.66% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Strong
Accuracy	100.0%
Values	Daily Returns

AMTD Digital  vs.  Genius Group

AMTD Digital

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in AMTD Digital are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound forward-looking signals, AMTD Digital is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

Genius Group

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Genius Group are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak basic indicators, Genius unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with AMTD Digital and Genius

The main advantage of trading using opposite AMTD Digital and Genius positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AMTD Digital position performs unexpectedly, Genius can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Genius will offset losses from the drop in Genius' long position.

The idea behind AMTD Digital and Genius Group pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.